History (1995): Seagate Forms Software Subsidiary

Seagate Technology (Scotts Valley, CA) has regrouped all the small software businesses it has acquired since 1993 under the aegis of a new, 100% wholly-owned subsidiary, Seagate Software, Inc. (Boston, MA).

Steve Luczo, executive of corporate development, will direct the new company.

Each of the acquired firms will continue for the present as they are without a restructuring of individual teams. The 5 companies involved are: Crystal Computer Services, Palindrome, Seagate Enterprise Management Software (formed in a merger of Network Computing and NetLabs), Frye Computer Systems and Creative Interaction Technologies.

Seagate Software develops data management applications in three main areas: storage management, network management and information management.

At the same time, for its European sales, Seagate has just formed 3 new legal entities for the major country markets: Seagate Software, Ltd. (Bracknell, UK), Seagate Software SA (Paris, France), which will serve as the European headquarters, and Seagate Software GmbH (Düsseldorf, Germany).

Michel Montandon, who was head of international operations for Crystal, was promoted VP with responsibility for European software activity. He will report directly to Luczo.

“Seagate’s total software investment since 1993 is between $100 and $200 million in sales, with each acquisition costing between 15 and 60 million,” Montandon reported. “We are in a run rate of between $100 and $150 million for the current fiscal year. The goal is to reach one $ billion.”

According to Terry Cunningham, CEO of Crystal, the present growth of Seagate given current activity should hit $500 million by 1999, and he thus foresees another $100 to $150 million of new investment by Seagate Technology in order to reach the designated $billion goal.

It is worth noting that Mark Reeves left the European direction of Arcada, a Conner subsidiary, just days before the incorporation of Seagate Software in order to join Montandon as director, European channel strategy.

In early August, Seagate Technology took an approximate 5% equity position in Verify, Inc. (Mountain View, CA), in order to integrate its Topic search and retrieval technology into Crystal’s new workgroup decision support application. The terms of the investment were not disclosed.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 92, published on September 1995.

Note: Seagate finally never really succeeds in software.